US lawmakers are pushing to bring crypto assets under the traditional “wash sale rules,” to plug tax loopholes

PANews July 28, citing CNBC, reports that some U.S. lawmakers are pushing to include crypto assets in the traditional “wash sale” rules, closing a long-standing tax loophole. Under the current rules, investors in securities such as stocks who repurchase substantially identical assets within 30 days before or after selling at a loss will be unable to claim the capital loss for that transaction, but cryptocurrencies such as Bitcoin and Ethereum are not constrained because, in the tax code, they are treated as “property,” enabling “tax-loss harvesting” without changing holdings. Republican lawmaker Jodey Arrington has introduced the “Applying Existing Tax Anti-Abuse Rules to Digital Assets Act”; the Treasury previously estimated that if wash sale rules were extended to digital assets, it could generate nearly $24 billion in additional revenue over 10 years. Some investors holding crypto assets through securitized products such as Bitcoin ETFs are already subject to wash sale restrictions.